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| The Tax Publishers2019 TaxPub(DT) 1418 (Bom-HC) : (2020) 421 ITR 0686 : (2019) 261 TAXMAN 0358 INCOME TAX ACT, 1961
Section 37(1)
AO could not disallow consultation charges paid by assessee by merely relying upon the statement of service provider recorded during search proceedings, which was retracted subsequently, because AO had no other independent material to make the disallowance.
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Business expenditure - Allowability - Consulting charges disallowed on the basis of statement of service provider, which was subsequently retracted -
AO had Disallowed consultancy charges claimed by assessee-company (Reliance Industires Ltd.) as business expenditure, which were made to an individual consultant. The basis of disallowance was the statement of service provider recorded during search operations stating that he had not rendered any service to assessee. However, CIT(A) and Tribunal, allowed the claim of assessee holding that there was sufficient evidence and AO did not have any other independent material to make disallowance. Held: The entire issue was based on the appreciation of facts and both the appellate authorities had concurrently held that there was sufficient evidence justifying the payments made to the consultant, and AO other than relying upon the statement of service provider recorded in search, which was retracted thereafter, had no independent material to make the disallowance. Thus, no question of law arose in the instant appeal.
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
INCOME TAX ACT, 1961
Section 80-IA
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